INTRODUCTION

Complaint of Canada

On 19 May 2000, Canada requested consultations with the United States pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (“the DSU”), Article XXII of the General Agreement on Tariffs and Trade 1994 and Article 30 of the Agreement on Subsidies and Countervailing Measures (“the SCM Agreement”), concerning US measures that treat a restraint on exports of a product as a subsidy to other products made using or incorporating the restricted product if the domestic price of the restricted product is affected by the restraint.

On 15 June 2000, Canada and the United States held the requested consultations with a view to reaching a mutually satisfactory resolution of the matter, but the consultations failed to settle the dispute.

On 24 July 2000, Canada requested the establishment of a panel to examine the matter.

Establishment and Composition of the Panel

At its meeting of 11 September 2000, the Dispute Settlement Body (“the DSB”) established a Panel pursuant to the request made by Canada in document WT/DS194/2.

At that meeting, the parties to the dispute also agreed that the Panel should have standard terms of reference as follows:

On 23 October 2000, the parties agreed to the following composition of the Panel:

Australia, the European Communities, and India have reserved their rights to participate in the panel proceedings as third parties.

Panel Proceedings

The Panel met with the parties on 18 January 2001 and on 21 February 2001. The Panel met with third parties on 18 January 2001.

On 27 April 2001, the Panel provided its interim report to the parties. See Section VII, infra.

FACTUAL ASPECTS

This dispute concerns the treatment of export restraints under US countervailing duty (“CVD”) law.